The Moneychanger
Weekly Commentary
Friday, 8 December a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  1-Dec-17 8-Dec-17 Change % Change
Silver, cents/oz. 1,629.70 1,573.60 -56.10 -3.4
Gold, dollars/oz. 1,278.80 1,245.20 -33.60 -2.6
Gold/silver ratio 78.468 79.131 0.662 0.8
Silver/gold ratio 0.0127 0.0126 -0.0001 -0.8
Dow in Gold Dollars (DIG$) 391.70 403.89 12.19 3.1
Dow in gold ounces 18.95 19.54 0.59 3.1
Dow in Silver ounces 1,486.87 1,546.08 59.21 4.0
Dow Industrials 24,231.59 24,329.16 97.57 0.4
S&P500 2,642.22 2,651.50 9.28 0.4
US dollar index 92.84 93.84 1.00 1.1
Platinum 939.40 882.80 -56.60 -6.0
Palladium 1,020.05 1,009.75 -10.30 -1.0

Adventures in Bubble Land continue. Dow this week rose 0.4% as did the S&P500, but the Dow in gold leapt 3.1%. Dow in silver rose 4%. US dollar index has rallied 100 basis points since last week. Platinum got creamed, down 6%. NYSE Bitcoin Index rose this week from $10,508.12 to 16,458.61, a modest $5,950.49 or 57% gain. Sure.

Bitcoin prices I give you jump around because I get prices from coindesk.com and there's never really a "close" there. Today they show a high at $17,153.94 and current at $15,935.35, down $922.67 or 5.47%. Here's a 15 month chart of the NYSE Bitcoin Index, http://schrts.co/sWTVTj That shows that as of today since its 30 December 2016 price Bitcoin has increased a modest 17,294%. Sure.

I note that today's Bitcoin trading -- rise to a new high with a lower close -- is the first day of a Key Reversal. Needs a lower close next day to confirm the reversal.

Am I become your enemy because I tell you the truth? I beg you, friends, if you have big Bitcoin profits, take heed! Nothing is profitable until you sell it and realize the profit. When it breaks, it will break suddenly. You will not have time to get out. Markets are not benevolent.

Wonderful US Dollar index, tick on the hide of the world dog, has a chart right here, http://schrts.co/yCBVoT Dollar index actually waded through its 50 & 20 day moving averages in the last two days, so we can rest pretty sure it has a ways to ascend yet. Ultimate target of that upside-down head and shoulders is 97. Whoops, I left something out. Notice that neckline at about 94. Dollar index must first penetrate that resistance, and immediately.

Surprising no one, stocks rose today. Dow industrials added 0.5% (117.68) to end at 24,329.16. S&P500 rose 0.55% or 14.52 points to 2,651.50. SP500 chart lives here, http://schrts.co/vtdPMb Because of the Santa Claus Rally self-fulfilling prophecy, stocks should rise into year end. Yet a bubble is subject to panic at any time.

Y'all know that when markets react after a long fall, they tend to correct by certain percentages: 38.2%, 50%, 61.8%, etc. Look at this Dow in Gold chart. From the August 1999 high, it shows you those correction levels for the fall from 44.762 ounces to 5.772 oz. To complete a 38.2% correction, the Dow in gold needs to rise to 20.67 oz. Hummm. Today it stands at 19.49, only 1.18 oz off that target. Just fiddlin' with numbers, I figured that if gold dropped to $1,210 that would put the Dow at 25,010.70; gold at $1,245 would put the Dow at 25,734.15 for a 20.67 Dow in Gold. I'm not predicting, just musin'. Looks like the correction up from the 2011 low at 5.772 oz (shows 5.82 oz on this chart) is just about complete.

'Twas a mixed day for silver & gold. Silver rose 2.1¢ (mercy) to 1573.6 on Comex while gold fell $4.60 to $1,245.20.

I'm not sure how much to make of it, or to make anything of it at all, but silver rose about 15¢ in the aftermarket. That's technically a sort of reversal, but would have to confirm that with a smartly higher day on Monday. Might be nothing more than dealers closing out their weeks and not wanting to go home with short positions. That is, by raising the spot price they charge, they are hedging against silver opening 15¢ higher on Monday.

I like to forgot the chart for y'all, http://schrts.co/o96FnV

On thisyere gold chart, http://schrts.co/DEojcM there's ne'er a sign of an upturn. Notice that once gold punctured $1,262, it fell to next support at $1,245. If that doesn't hold, next support looms at $1,230 - $1,225, and thence to $1,210. I am not predicting, only observing the most logical stopping points. We will get some sign, however faint, when it turns around.

My beloved Susan was a mad dog Christmas decorator. She even strung lights in the trees outside, and of course around the alcove in the living room where our fireplace stands, and around the big double kitchen window. Her thirst for beauty and celebration drove her to adorn and bedeck everything around her. Mercy, I miss that, but I am thankful I had her as long as I did. Y'all go wild decorating and preparing for Christmas. It's worth it.

Generally I don't ask y'all for favors, but now I am. Our Church has a jail ministry and through that gives or ships to jail and prison inmates excellent and fairly expensive Study Bibles in the English Standard Version. Couldn't tell y'all how many letters we've gotten thanking us for finally having a Bible they could read AND understand. They also have notes, cross references, book outlines, concordance, and everything needed to study the Bible seriously.

We don't just throw Bibles at people When they write and ask, we send them a letter asking them to vow to God & themselves that they will read it twice a day and pray when they do. To those who respond affirmatively, we send a Bible. We also encourage them to form study and prayer groups with their cell mates. Do they all keep the vow? Of course not, but some do, and some become new men and women.

These are what you would call "nice" Bibles if you saw them, with a leather cover -- best gift some of these folks have ever received. We bought 500 on a close-out at $19, but now are about to run out. We have to buy at least 500 & we'll have to pay $28 for these. Can't go with a paperback because they fall apart.

Now if you have a family of five, twenty-eight bucks is about what you'd pay for a family meal at McDonald's: it's not much for you. But for an inmate, many of whom have alienated their families and sit destitute in prison, that Bible opens a window on a whole new universe and shows them that love is not a lie.

So here at the end of the year, looking forward to Christmas, would y'all like to help me give Christmas gifts to these inmates all year round? Every $28 you send will buy another Bible, and, yes, you can buy more than one Bible for the inmates. You can buy two or five or twelve or a hundred, many as you want. We won't send back any checks because they're too big or too little.

Please make out and send your check to Christ Our Hope Reformed Episcopal Church, P.O. Box 195, Westpoint, Tennessee 38486. And thanks for opening your hearts enough simply to read my request.

Y'all enjoy your weekend.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

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Market Snapshot See more charts and market data
8-Dec-17 Price Change % Change
Gold, $/oz 1,245.20 -4.60 -0.4
Silver, $/oz 15.74 0.02 0.1
Gold/Silver Ratio 79.131 -0.293 -0.4
Silver/Gold Ratio 0.0126 0.0000 0.1
Platinum 882.80 -10.80 -1.2
Palladium 1,009.75 -6.55 -0.6
S&P 500 2,651.50 14.52 0.6
Dow 24,329.16 117.68 0.5
Dow in GOLD $s 403.89 3.47 0.9
Dow in GOLD oz 19.54 0.17 0.9
Dow in SILVER oz 1,546.08 5.42 0.4
US Dollar Index 93.84 0.09 0.1
IMPORTANT NOTE: The following are wholesale, not retail, prices. To figure our retail selling price, multiply the "ask" price by 1.035. To figure our retail buying price, multiple the "bid" price by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
SPOT GOLD: 1,247.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,270.26 1,289.60 1,289.60
1/2 AE 0.50 635.87 658.21 1,316.43
1/4 AE 0.25 321.05 335.35 1,341.39
1/10 AE 0.10 130.91 136.63 1,366.34
Aust. 100 corona 0.98 1,210.86 1,223.09 1,247.80
British sovereign 0.24 295.94 308.94 1,312.38
French 20 franc 0.19 230.63 234.63 1,256.75
Krugerrand 1.00 1,251.54 1,261.54 1,261.54
Maple Leaf 1.00 1,255.80 1,271.80 1,271.80
1/2 Maple Leaf 0.50 717.49 655.10 1,310.19
1/4 Maple Leaf 0.25 318.19 333.79 1,335.15
1/10 Maple Leaf 0.10 132.27 136.01 1,360.10
Mexican 50 peso 1.21 1,489.30 1,500.30 1,244.34
.9999 bar 1.00 1,252.17 1,259.80 1,259.80
SPOT SILVER: 15.77      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.50 33.33
VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 10,918.05 11,204.05 15.67
US 40% silver 1/2s 0.30 4,460.40 4,607.40 15.62
100 oz .999 bar 100.00 1,557.00 1,592.00 15.92
10 oz .999 bar 10.00 159.20 164.20 16.42
1 oz .999 round 1.00 15.57 16.17 16.17
Am Eagle, 200 oz Min 1.00 17.27 18.77 18.77
SPOT PLATINUM: 882.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 897.80 927.80 927.80
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

Warnings and Disclaimers

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary trend is up, targeting 16:1 gold/silver ratio or $195.66; stock's primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 16 ounces of silver. US$ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

Be advised and warned:

  • Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short-term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.
  • NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.
  • NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.
  • NOR do I recommend buying gold and silver on margin or with debt.
  • What DO I recommend? Physical gold and silver coins and bars in your own hands. For additional information, please see our Ten Commandments for Buying Gold and Silver.
  • One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Explanation of Terms

The US DOLLAR INDEX is the average exchange rate for the US dollar against the Euro, Yen, Pound sterling, Canadian Dollar, Swiss Franc, and Swedish Krona, weighted for each country's trade with the US. It gives a general measure of the US dollar's performance against all other currencies.

The DOW IN GOLD DOLLARS measures the Dow Jones Industrial Average in gold dollars (0.048375 troy oz. by law). The DiG$ depicts the Primary (20 year) Trend of stocks against gold. When the DiG$ is dropping, gold is gaining value against stocks in a trend that should last 15-20 years. The DiG$'s chart is identical to the Dow in ounces of gold, but gives us one unvarying measure all the way back to 1896. Because it shows the primary trend ("tide") of gold against stocks, for investors it is the single most important financial chart in the world today. Since its August 1999 high at G$925.42 (44.8 ounces), the DiG$ has trended down, targeting a G$80-G$20 (4-1 oz. of gold will buy the whole Dow).

The DOW IN SILVER OUNCES shows how many ounces of silver are needed to buy the entire Dow. The DiSoz is trending down with a target of under 36 ounces.

The GOLD/SILVER RATIO is the gold price divided by the silver price, and shows how many ounces of silver it takes to buy one ounce of gold. The Ratio shows us the Primary (20 year) Trend of gold's value against silver. When the Ratio's trend is dropping, silver is gaining value against gold. This trend targets a gold/silver ratio of 16 ounces of silver to one of gold within the next 5-10 years. That implies that silver will massively, vastly outperform gold before this bull market ends. When both metals are rallying, the ratio often (but not always) drops, confirming the rally.

Other Important Information

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